Satoshi Nakamoto’s vision for modern day bitcoin has failed. In his whitepaper, Satoshi envisioned bitcoin as a form of electronic cash, a payment system designed to replace banks.
That has not happened at this moment in time. Instead, bitcoin is largely treated as an investment and store of value. Bitcoin has a fundamental issue: It has two competing visions.
To be clear, I’m not saying that this can never happen. Bitcoin could become a payment system embraced across the world that replaces cash and other trust-based systems.
What I am saying is that right now there are two very different visions people hold for bitcoin:
Nothing is necessarily wrong with either one of these visions, just like there’s nothing intrinsically wrong with cash or gold. They simply have very different functions.
Right now, I believe the problem bitcoin has is that different segments of the community disagree in what bitcoin should be.
Investors and traders are happy with what bitcoin is now: An investment vehicle that goes up in value over time.
People involved in payments processing are unhappy with bitcoin: It isn’t electronic cash yet.
One thing that needs to happen is the community needs to unify between one of these visions.
Bitcoin can’t be both a payments system and an investment.
Because most consumers won’t be willing to pay using something that increases in value. It’s that simple.
In the past, Satoshi Nakamoto envisioned bitcoin as electronic cash.
In the present, bitcoin is largely an investment.
Again, different communities are trying to do different things with bitcoin.
Lightning Labs is developing the Lightning Network for bitcoin, designed to upgrade bitcoin’s scalability and help it process payments.
Specifically, the Lightning Network allows two parties to transact outside of the main bitcoin network. This will greatly reduce strain on the network.
It will also allow small payments to occur instantaneously and with low fees.
These aspects are great – if bitcoin is used as a currency, not an investment.
Meanwhile, the Winklevoss twins are working on developing the Gemini Exchange.
This is also great news for the space. The Gemini Exchange is designed to revolutionize cryptocurrency investing.
However, you can see the underlying difference between these two large ventures.
One is treating bitcoin as a payments system, a form of digital cash.
The other treats it as an investment.
Eventually one of these two visions will have to change.
Whose vision will win out?
Only time will tell.
Will Salisbury is the co-founder of Blockchain Decrypted and full-time cryptocurrency trader. He also hosts the Blockchain Decrypted podcast, and when he's not talking or writing about blockchain technology and cryptos, he likes to play games and relax in his home state of Michigan.
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